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Biogen shares fall as Alzheimer’s drug concerns cloud profit beat

Biogen Inc beat estimates for quarterly profit on stronger-than-expected sales for its muscle wasting disorder drug, although concerns over its reliance on its yet-to-be approved Alzheimer’s therapy, aducanumab, weighed on shares.

The drugmaker declined to provide details on talks with the U.S. FDA about the drug’s product label, which analysts said could be interpreted as a slower-than-expected regulatory progress for the therapy.

Aducanumab, which could become a blockbuster quickly, if approved, has faced a bumpy regulatory road, with outside experts to the U.S. Food and Drug Administration voting against the treatment last year. The FDA is due to decide on the drug by June 7.

Biogen has been under pressure on multiple fronts, with its mainstay multiple sclerosis drug, Tecfidera, facing increasing competition from cheaper drugs, pushing the company to pin its future growth on the Alzheimer’s drug.

“Should aducanumab fail to gain approval in June 2021, that would leave Biogen with little in the way of a contingency plan and heavier reliance on pipeline assets,” Wedbush analyst Laura Chico said.

Critics argue that more data is needed to show the effectiveness of the drug but those in favor of an approval have pointed to the large unmet medical need for Alzheimer’s disease.

The company reiterated that its 2021 forecast includes possible sales from the treatment and said 600 sites are ready to treat patients with the drug.

Sales of multiple sclerosis drug Tecfidera more than halved in the first quarter to $479.3 million and the company is also facing competition for its other growth driver, spinal muscular atrophy drug Spinraza.

The company’s quarterly profit, however, beat estimates, as sales of Spinraza fell less than expected.

Excluding items, Biogen earned $5.34 per share, above expectations of $5.04.

The company’s shares were down 3% at $261.5 in midday trading.